5 Core Recruiting Metrics Every Hiring Team Should Benchmark

The Hire Team

Published Dec 10, 2018

In the process of building your recruiting funnel, you’ll surface a
dozen burning questions.

Which job posting sites are pulling their weight, and which just
drain budget and energy? Are you spending too much time on phone
screening, or too little? Are there are any problems that repeatedly
prevent quality candidates from accepting your job offers?

Ultimately, just how good is the recruiting process you’ve built?

Recruitment metrics provide these answers. They flag problems at the
first sign of trouble—whether it’s a bottleneck in the hiring
process or a shortfall in applicants—and offer concrete
opportunities to build a better, stronger recruiting process. We’re
sharing five essential metrics every hiring team should track,
analyze, and improve to build a healthy hiring funnel.

Why it’s time to start tracking recruiting metrics

Recruiting metrics allow everyone—recruiters, hiring managers, and
executives—to take a step back from the day-to-day tasks of hiring
to get an overview of the effectiveness of their hiring process. They
ensure that every decision serves a broader company goal, with every
dollar of recruiting spend translating into meaningful company
growth.

The metrics we’ll cover achieve that goal in three ways, providing
companies with the following:

A common language. Metrics provide clear, concrete terminology,
allowing recruiters and executives alike to discuss and take action
on the strengths and weaknesses of their hiring process.

Better candidate experiences. Many metrics make it easy to spot
and remedy “outlier candidates”—applicants who are stuck in a
certain stage of the hiring process or still awaiting feedback.

Opportunities for constant improvement. The best metrics
create opportunities to expedite the hiring process, to source more
qualified candidates, and to improve acceptance rates.

5 essential hiring metrics

We’re sharing five core recruiting metrics that should lie at the
heart of every business’s reporting process.

1. Pass-through rate

Every recruiting process will have several distinct stages—new
applicant, screening,
interviewing, offer, and so on. The pass-through rate, also known as
the conversion rate, measures the drop-off between each of these
stages.

For example, if a job posting attracts 1,000 new applicants, and 500
are deemed suitable for a phone screen, the new
applicant-to-screening pass-through rate would be 500/1000, 0.5 or
50%. If 200 of those candidates go on to interview, the
screening-to-interviewing pass-through rate would be 40%, and so on.

Track your pass-through rates to help you identify bottlenecks

Tracking the pass-through rates for each of your hiring stages helps
identify and remedy potential bottlenecks:

A high screening-to-interview rate might suggest that your
screening process should be more selective; too many unqualified
candidates make it through to interview, needlessly taking up
interviewer time and slowing down the entire process.

A low offer-to-hire rate could suggest that some aspect of your
offer letter
is deterring candidates, effectively sabotaging the
hard work required to identify the best candidates. Digging into
common reasons for rejection (see metric 3) might allow you to
overcome the problem by offering a more
competitive compensation package,
responding faster to candidates, and so on.

2. Source quality

Candidates can come from dozens of different sourcing channels—
job posting sites,
employee referrals, social media, your company careers page,
recruitment agencies, and others—but not all sources are created
equal. To determine where you want to double down, you could track
the total number of applications generated by each source. Consider
the following two examples:

Social media: 1,000 applicants per month

Referrals: 500 applicants per month

At first glance, you might assume social media was a more effective
source of hire—twice as effective. You may even increase your social media
advertising budget as a result.

But applications are a “vanity metric” since they don’t necessarily
drive the desired outcome, quality hires, in this case. It’s more
useful to determine which channel drives the most hires. To do this
start by calculating the ratio of applicants to hires by channel.

Track your applicant to hire ratio, not just your number of applications

Assuming the ratios remain constant, you can now see that despite
the fact that social media drives twice the applicant volume,
referrals drive twice the number of hires. Comparing sources this
way allows you to focus on the outcome that really
matters—successfully making a new hire—and make smarter decisions
about where to allocate budget.

3. Distribution of rejection reasons

Getting candidates to the point of offer is often a long, involved
process—effort that can go up in smoke if a significant number of
candidates turn down your offer. Understanding the distribution of
your most common rejection
reasons highlights any roadblocks that repeatedly prevent great
candidates from accepting your job offer.

For example:

If your recruiting process moves too slowly and good candidates
accept other offers before you’ve made yours, you may look for
bottlenecks in your hiring process to unblock.

If strong candidates struggle with imposter syndrome, and feel
unqualified for the role, it might be useful to add greater detail
and explanation to your
job description
to help candidates visualize themselves in the role.

If a candidate wasn’t satisfied with the salary offered, you
may need to review your compensation package for fairness and
competitiveness.

This feedback is key for recruiters, but it has wider implications
for the entire business—especially if company-wide concerns like
culture hinder the recruitment process.

While it’s helpful to benchmark offer-acceptance rates—for example,
80% of candidates accept the job offer extended to
them—understanding common reasons for offer rejection provides more
opportunities to improve the hiring process and make more hires as a
result.

4. Time to fill

Time to fill—also known as time to hire, or TTH—measures the time
period between the start and the end of the hiring process. Those
start and end points often vary from company to company:

Start: first identifying the hiring need, posting the job, or
receiving the first application

“The key to making TTH actionable is to break it down into its components,
examining those for hints on where to optimize your hiring process
for speed.

Once you’ve broken your process into steps, figure out how many days
on average your candidates spend in each phase. . . . Once you’ve
identified your ‘problem areas,’ you can investigate the source of
the slow down and take focused action to remove blockers.”

By tracking time to fill by hiring stage, job type, or recruiter,
you can identify parts of the hiring process that take too long,
particular vacancies that take significantly more time to fill than
the average, and understand and emulate the habits of your most
efficient recruiters.

5. Cost to fill

Your employees are your company’s greatest asset, while recruiting
them is one of your greatest costs. Striking a balance—attracting
the right talent in a way that’s affordable and sustainable—is one
of the biggest challenges you’ll face. This is true for established
businesses looking to scale successful teams and for startups trying
to secure funding and make those first few pivotal hires.

Understanding cost to fill—also known as cost per hire—is the first
step in striking that balance. By analyzing all of the costs
associated with making a hire, it’s possible to truly understand the
financial impact associated with scaling your business.

As well as fulfilling the basic need of keeping to your recruitment
budget, understanding cost to fill opens the door to more advanced
metrics—factoring in the quality of each hire, retention rates, and
ultimately beginning to calculate the real return on investment of
every hiring decision.

Improving your hiring process over time

These hiring metrics provide a valuable introduction to reporting,
allowing you to become familiar with tracking key performance
indicators and, most important of all, take action on their
insights. Over time, you’ll be able to strengthen your reporting
process even further, incorporating metrics like
candidate experience,
quality of hire, and workplace diversity.

In doing so, you’re creating new opportunities to radically improve
the hiring process—for both candidate and company—over time. As Jeff
Moore explains, “Not only does this approach let you source more
effectively and target people you’ll be more likely to hire, but it
also allows you to take a deeper look at the talent you’ve added to
the team and ask if that’s the right talent moving forward.”

About Hire by Google

Hire is a recruiting app by Google that uses AI to make the hiring process faster and simpler. Because it is designed specifically for G Suite users, with Gmail, Google Calendar and other G Suite integrations, Hire streamlines administrative tasks so that your team can hire the best people, faster.